Factory Orders Post Stronger than Expected Gains in March

Factory orders, or new orders for manufactured goods, rose $9.3 billion or 1.9% to $508.2 billion in March, stronger than the consensus forecast.

The consensus forecast was looking for a 1.5% gain, ranging from a low of -0.5% to a high of 2.2%.

New orders for manufactured durable goods have been up four of the last five months, and increased $6.6 billion or 2.6% to $258.0 billion in March. That’s down slightly from the previously reported 2.7% gain, but up from the 1.3% decrease in February.

The upward revisions are a net positive for gross domestic product (GDP). The Bureau of Economic Analysis (BEA) “advance” estimate for Real GDP in Q1 2019 came in at an annual rate of 3.2%.

Transportation equipment also has been up four of the last five months, and led the increase in March by rising $6.1 billion or 7.0% to $93.8 billion.

New orders for manufactured nondurable goods rose $2.8 billion or 1.1% to $250.2 billion.

Shipments of manufactured durable goods have been up four of the last five months, and increased $1.0 billion or 0.4% to $259.5 billion in March. That’s up from the initially reported gain of 0.3% and follows a 0.2% increase in February.

Transportation equipment was up in March after two straight monthly declines, and drove the increase in shipments by rising $1.0 billion or 1.1% to $90.7 billion.

Shipments of manufactured nondurable goods have been up two consecutive months and rose $2.8 billion or 1.1% to $250.2 billion after gaining 0.8% in February.

Petroleum and coal products were also up two consecutive months, and drove the increase in nondurable shipments rising $3.2 billion or 6.0% to $55.5 billion.

Unfilled orders for manufactured durable goods in March have been up two of the last three months, and gained $2.7 billion or 0.2% to $1,181.2 billion in March.

While that’s down from the initially published 0.3% increase it follows a 0.2% decline in February. Transportation equipment drove the increase and is also up two of the last three months, rising $3.1 billion or 0.4% to $811.9 billion.

Inventories of manufactured durable goods have been up twenty‐six of the last twenty‐seven months, and gained $1.2 billion or 0.3% to $420.5 billion in March. That’s unchanged from the initially published increase and follows a decline of 0.4% in February.

Machinery has been up fifteen of the last sixteen months and led the increase in inventories for March, rising $0.7 billion or 1.0% to $71.7 billion.

Inventories of manufactured nondurable goods have been up three consecutive months, and rose $1.6 billion or 0.6% to $270.4 billion in March after gaining 0.2% in February. Petroleum and coal products have also been up three consecutive months and rose $1.2 billion or 3.0% to $41.5 billion in March

Materials and supplies decreased 0.1% in both durable goods and nondurable goods during March, regarding stage of production. Work in process rose 0.5% in durable goods and 1.1% in nondurable goods. Finished goods gained 0.5% in durable goods and 0.9% in nondurable goods.